Research Paper

Wesley Jiang
Mr. Disimile
Global Markets
12 May 2015
Transformation of Hollywood The film industry is like any other business industry, subjected to change, whether it is due to change of technology or change of consumer taste. Throughout the history of film industry, changes always brought opportunities and the entrepreneurs that took these opportunities created by the changes thrived. During the 1920s and
1950s,
there was no change in the film industry other than the fact that movie studios were making more and more money. The film industry operated under the studio system, a system so powerful that gave studios complete control over directors, actors, and even the supply chain. However, starting in the late 1940s, the powerful hollywood began to fall. The old film industry was being forced to change due to government involvement, foreign competition, and rise of television.
Between the 1920s and
1940s,
known as the golden age of hollywood, the film industry was dominated by the major five studios, 20th century fox,
Metro­Golgwyn­Mayer (MGM), Warner Bros, RKO Pictures, Paramount Pictures, and
20th Century fox. During that era, studios had two strategies that made them more powerful than today’s studios. They had directors and actors under control and the supply chain as well. It did not matter how famous and talented the directors and actors were, they were all under long­term contracts with the studios. They all worked for a salary, being assigned to films and swapped between studios.
The studios practically

Jiang 2

owned the creative personels, after the studios made all the decisions about film productions, and assigning directors and actors to different film projects. Similar to the present­day Asian, and ironically parts of American entertainment industry, studios took promising young actors under contract and gave them new public image with methods from changing names to plastic surgery. In order to make the stars more marketable, studios forced them to all behave like perfect ladies and gentlemen. These stars were assigned to projects, willing or unwilling, leaving them no creative freedom. With all the restrictions from the studios, directors were also stifled in their creative pursuit. In no way shape or form, directors had the power their have today in film production; they had minimum control over their movies since most decisions had already been made by studios.
The quality of the films also did not matter as much because they dominated exhibition of the films with vertical integration, meaning that they directly owned their supply chains.
Other than having complete control over production and distribution of films, the big five studios also owned their own movie theaters under the model of vertical integration. With the ownership and effective control of distributors and exhibition, additional sales of films were guaranteed. There were many situations where one studio controlled all of the theaters in a town or city, for example, Paramount owned every theater in Detroit, establishing a monopoly on film distribution in one of America's largest cities at the time. The less prominent studios, Universal, Columbia Pictures and
United Artists never owned more than small theater circuits, and relied on independent theaters to carry their movies. With the exhibitions under control, the studios were able

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to block other competitions, making independent films impossible to publish. One of the biggest technique used by theaters to guarantee sales in their films was block booking, selling multiple films as a unit to theaters . Attractive movies are often bundled with B movies, low­budget films. One bundle could be from 10 to 100. Paramount obtained chains of theaters with 1200 screens, and insisted that the exhibitors and independent theaters sign a contract for exclusive top­of­the­line Paramount…

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